Late pick up helps Nifty to reclaim 11,000 mark

NSE gauge -- Nifty50 -- gave powerful performance by surging over one and half percent on Thursday, surpassing its psychological level of 11,000, boosted by reports that the government is contemplating to roll higher surcharge on foreign portfolio investors (FPIs). Market made a positive start, but soon lost momentum to trade flat, as traders turned cautious with Reserve Bank of India’s (RBI) latest survey report stated that consumer confidence declined in July as reflected in the current situation index (CSI); the future expectations index (FEI) fell by about 4 points. It said consumers’ perceptions on the general economic situation and the employment scenario softened, while their assessment of their own incomes turned out to be less optimistic than in May 2019. But, soon after market gained traction and traded in fine fettle, as traders found some support with the India Meteorological Department (IMD) data showing that India received 28% more rainfall than the 50-year average in the week to August 7, easing concerns of drought. Monsoon rains are crucial for farm output and economic growth, as agriculture forms about 15% of India's $2.5-trillion economy.

Buying got intensified during final hours of trade to touch intraday high point, as sentiments were buoyed as Reserve Bank of India (RBI) announced two key measures to help non-bank financial companies (NBFCs) which are facing a severe liquidity squeeze. The first is harmonisation of single counterparty exposure limit for banks' exposure to single NBFCs with the general single counterparty exposure limit. The central bank has decided to raise a banks’ exposure limit to a single NBFC to 20 per cent of tier-I capital of the bank. Market participants took a note of Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf’s statement that the removal of some provisions of Article 370 will not only bring in huge trade and business opportunities for both Jammu & Kashmir (J&K) and Ladakh regions but will also help get the troubled region to stand on its feet.

All the NSE sectoral indices ended in green. The top gainers from the F&O segment were Aurobindo Pharma, HCL Technologies and Vodafone Idea. On the other hand, the top losers were Reliance Infrastructure, Cummins India and Birlasoft. In the index option segment, maximum OI continues to be seen in the 11350 - 11,700 calls and 10,900 - 11,100 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 3.87 and reached 16.09.The 50 share Nifty was up by 176.95 points or 1.63% to settle at 11,032.45.

Among, Nifty calls, 11,000 SP from the August month expiry was the most active call with a contraction of 0.13 million open interests. Among Nifty puts, 10900 from the August month expiry was the most active put with an addition of 0.36 million open interests. The maximum OI outstanding for Calls was at 11500 SP (2.35 mn) and that for Puts was at 11,000 SP (3.42 mn). The respective Support and Resistance levels of Nifty are: Resistance  11,112.68--Pivot Point  10,977.82--Support--10,897.58.

The Nifty Put Call Ratio (PCR) finally stood at 1.31 for August month contract. The top five scrips with highest PCR on Bosch (2.65), Oracle Financial Services Software (2.00),Hindustan Zinc (1.80), Asian Paints (1.31), Godrej Consumer Products(1.31).

Among most active underlying, Reliance Industries witnessed an addition of 0.69 million units of Open Interest in the August month futures contract, followed by State Bank of India witnessing an addition of 4.91 million units of Open Interest in the August month contract, Axis Bank witnessed an addition of 4.40 million units of Open Interest in the August month contract, HDFC Bank witnessed an addition of 0.33 million units of Open Interest in the August month contract and Tata Steel witnessed an addition of 2.86 million units of Open Interest in the August month future contract.